and the evolving nature of those industries, he’ll do well.”
He’s come a long way since his first major business deal, when he partnered with black enterprise publisher Earl G. Graves Sr. to purchase a Forestville, Maryland, Pepsi-Cola distributorship in 1990.
Graves says that when he first considered working with Pepsi, it was suggested he take on a partner to expand the deal. There was talk about partnering with an athlete, so Graves contacted the respective commissioners of the NBA, the National Football League and Major League Baseball. NBA Commissioner David Stern recommended Johnson, whom he knew was interested in finding a business venture and, as it turned out, was already on board as a Pepsi pitchman. Graves ran it by Pepsi executives, who liked the idea. Then he contacted Johnson.
“The deal was done with myself, a lawyer, Magic, [agent/advisor] Michael Ovitz and Craig Weatherup [then president and CEO of Pepsi-Cola Co.]. Five people in a room over at the 21 Club. Magic said to me, ‘I’ve checked you out and I know you’ve checked me out. So let’s do some business.’ We got up, shook hands and we were in business.”
With Graves as chairman and CEO and Johnson designated executive vice president, the distributorship was Johnson’s first experience dealing with business executives as a corporate player. “The experience was great because it was my first time playing on a major league level,” he says. “I got exposed to the meetings with bankers, dealing with customers, working with a client base. You work all the way from dealing with mom-and-pop grocery stores to ta
lking with the Marriott Hotel chains,” he explains. “We didn’t get every account, but we got a lot of them. I learned just how important relationships are.”
Graves says Johnson’s enthusiasm for business was apparent, and any concerns he had about Johnson’s lack of business experience evaporated quickly. “If I had any reservations early, they were overcome by the nature of his personality. It was clear that he really wanted to be a businessman and be someone that others would take seriously,” says Graves. “So it wasn’t a matter of ‘Show me where to sign and I’ll do it.’ He wanted to understand what it was all about.”
But as in any business marriage, Graves says there were occasional problems. At the time, Johnson was still traveling across the country as a member of the Lakers-severely limiting the time he could put into the business.
“Basketball distracted him. Part of the frustration for him was that he couldn’t focus on the business as much as he wanted to. He wanted to be involved as more than an investor, but it’s impossible to be hands-on when you’re 3,000 miles away,” Graves says. “Now, when he came to town, we could literally stop traffic in terms of how responsive people were to him. If he had had the time, it would have been a home run. But you can’t play basketball and have all the different things that pulled on him and